Description of employee groups issue

[chris]

Is it permissible to define the classes in a cross-tested PSP as follows: Group A is all highly compensated employees. Group B is all other employees. ???

I was in the midst of amending and restating a PSP and found that the TPA had drafted the above amendment some time back.

I typically define the classes somewhat such as.... Group A is all employees who are licensed to practice medicine and who are shareholders of Employer. Group B " " who are not shareholders of the Employer. Group C is all other employees.

Thanks for your help

[Mike Preston]

Yes.

[Guest auntmee8]

In using the "participants who are highly compensated Employees" allocation group you may want to consider a separate group for HCE's who are children and spouses that are much younger. You could separate them into another allocation group defined as Children of owners/highly compensated employees, or Participants who are treated as Highly Compensated Employees solely because of their family relationship to another HCE